Tunisia's Islamist Prime Minister Ali Larayedh said on Tuesday he was ready to step aside for a caretaker cabinet to hold new elections, but would not create a power vacuum while the country faced serious security and economic challenges.

He said this after announcing Tunis had proof the jihadist group Ansar al-Sharia had assassinated two secular politicians and killed eight soldiers in recent months and so had now officially classified it "as a terrorist group".

Larayedh, speaking amid intense speculation about the future of democracy in the birthplace of the Arab Spring revolts, said the drafting of a new constitution must be finished and all parties must agree on the election plan before he stepped down.

"We are not playing politics with the security of the country," he told a news conference, anticipating the reaction that promptly came from opposition critics who have long accused his Islamist Ennahda party of being lax with Muslim radicals.

"I am ready to step down if that can resolve the problem," he said, referring to a stalemate paralysing Tunisian politics since the second assassination this year and the killing of eight soldiers near the Algerian border, both in July.

"But we think a caretaker government would not be the best solution in this critical phase on the security and economic fronts," he said. "The government has to continue to work in a disciplined way until a consensus is achieved."

Tunisia, struggling to save its nascent democracy amid popular discontent and the Egyptian army's ousting of the Muslim Brotherhood government there, has seen mounting pressure on the unpopular Ennahda party to step aside for new polls.

Rached Ghannouchi, the party chairman who shapes policy from outside the government, has accepted to negotiate with the opposition under the mediation of the powerful UGTT trade union federation but not revealed many details of his position.

Larayedh spelled out the government's four-point response to opposition demands that it quit immediately. He said his cabinet should stay in office to maintain state authority at the start of the transition.

The assembly elected in 2011 to write a new constitution should promptly resume its work, which was suspended in late July, and finish the document by Oct. 23, he said.

FREE ELECTIONS

Tunisia's President Moncef Marzouki should consult all parties in search of a consensus on a caretaker government that can organise and hold free elections under the surveillance of international observers, he said.

"The government will leave when that dialogue arrives at a consensus," he said, without indicated how long that could take.

Larayedh said the reclassification of Ansar al-Sharia, whose main leaders have been sought for violent acts since December, would bar other members from holding meetings, preaching and agitating for sharia law as they have been able to do until now.

Ansar leader Saifallah Benahssine, also known as Abu Iyadh, is a former al Qaeda fighter in Afghanistan being sought by Tunisian police for allegedly inciting an attack on the U.S. embassy in Tunis in September 2012.

Four people were killed in those disturbances, which began as a protest over a film that mocked the Prophet Mohammad.

Ansar al-Sharia is the most radical Islamist group to emerge in Tunisia since secular autocrat Zine al-Abidine Ben Ali was toppled in 2011 in the first of the Arab Spring revolts.

It was the prime suspect after the assassinations of leftist secular leaders Chokri Belaid in February and Mohamed Brahmi in July, which police said were carried out with the same gun.

It was also suspected in the killing of eight soldiers, some of whose throats were slit, in the rugged Mount Chaambi area near the Algerian border in July.

The assassinations and killings of the soldiers plunged Tunisia into political turmoil late last month. The discussions and mediated contacts among politicians in recent weeks are aimed at breaking that deadlock and leading to new elections.

Ennahda, which governs in coalition with two smaller secular parties, has come under growing pressure from critics for promoting an Islamist agenda and mismanaging the economy and the security challenge from radical Salafi and jihadist Muslims.

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